The ATO will be focusing their reviews and audits on three main areas in 2022:
The first focus area is deductions that are private in nature. Many of us non-essentials have been working from home throughout the Covid pandemic. To accommodate for this lifestyle change, the ATO has been providing a temporarily enhanced home office hourly deduction of 80 cents per hour. If you are claiming actual expenses instead of the default rate, double-check the rules for everything you want to claim because this is the ATO’s first focus.
The second focus area is the omission of business income. Most sharing economy platforms are also sharing information with the ATO. They are making a list and checking it twice when returns are filed to confirm that all business or rental income has been reported.
The last focus area for the year is record keeping. There are many technical rules that need to be followed to claim a valid deduction. For most items, a tax invoice and proof of payment will suffice, but others may require a signed document or something else more extensive. If the transaction is not an ordinary one, it could be beneficial to confirm what substantiation is required.